12 BULLETIN 1480, U. S. DEPARTMENT OE AGEICTJLTURE 
from year to year as relatiye production changes. The United 
States annual average price is weighted from year to year by con- 
stant weights based on the " usual '' rate of marketings month by 
month, expressed as a percentage of the usual year's total market- 
ings. In the following discussion this method of determining the 
average annual crop-year or calendar-year price for the United 
States will be known as method A. 
A second method of obtaining an average annual price for the 
United States, which appears more logical than method A, is as 
follows and will be known as method B. 
The United States annual crop-year average price is determined 
by averaging State annual prices, using the production or total sales 
by States as weights. The State annual prices are obtained by 
averaging the monthly prices for a given State, using the monthly 
percentage of each year's total marketings as weights. The weights 
from year to year are not constant, as the " current " marketings are 
used for each year. They can be determined only at the close of 
the crop year. A monthly United States price average can not be 
obtained with this method, as the State marketing weights are on a 
percentage basis only. 
Method B involves more labor than method A and requires rela- 
tively more accurate information concerning monthly marketings 
than is now available on a State basis for most farm products. It 
would necessitate the determination of monthly marketing weights 
for each State, whereas now these weights are determined only for 
the United States as a whole. States with small production and 
very few sales influence the United States average very little, but 
averages for these marketings would be very difficult to obtain on a 
State basis with the methods now employed and the facilities now 
available. There is some question as to whether States which pro- 
duce very little of a given farm product — not enough for their own 
needs — should be included in the United States average price. This 
production has a value and should be included in the total produc- 
tion and total value for the United States. It is also a factor influ- 
encing price, as it is a part of the potential supply. To disassociate 
ideas of price per unit from value of production is difficult. With 
cotton, however, no such question arises, as it is all sold from the 
farm. 
A third method of weighting, called method C, to ascertin the 
annual average price for the United States is similar to method B, 
and will at the same time permit a monthly United States price to 
be obtained at the close of the year only and not- from month to 
month as the season advances. The monthly percentages of each 
year's marketings by States are applied to the total quantity sold 
each j 7 ear, and the quantity sold per month in each State is used as 
a weight. These weights can then be used month by month in work- 
ing up the annual price for a given State, or State by State for the 
monthly price for the United States. In this v T ay the monthly price 
in each State is weighted by sales in that month in determining both 
the State annual price and the United States monthly price, and in 
turn the United States annual average price. 
Method C in reality gives a United States annual average price 
which closely approximates the average sale price for the product. 
